Taking a Unique Approach to Expand Small Business Lending

Panelists include: William Davis, Able Lending; Mark Rockefeller, StreetShares; BJ Lackland, Lighter Capital; Moderator: Jacob Haar, Community Investment Management.

The three companies featured on this panel have taken a different approach to small business lending; small business lending has declined since 1995 and banks simply can’t underwrite in these unique ways, leaving a large gap in the market; Lighter Capital focuses on providing long term growth capital to tech startups, funding them with a long term royalty agreement where borrowers pay a percentage of revenue over time; this model works since tech startups usually have high margins and sticky revenue; StreetShares and Able Lending have included behavioral finance in their models; StreetShares focuses on funding small businesses run by and also funded by veterans; this affinity model increases a borrower's propensity to pay; since 15% of small business owners have a military or veteran association this leaves a large pools of borrowers to tap into through partnerships; Able Lending in a similar way invites borrowers to bring in family and friend backers into a loan which significantly reduces the interest rates they can offer to small businesses; the panel explorers each of these business models in detail in this video from LendIt USA 2017.